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♪ >> live from pier 3 from san francisco, welcome to "bloomberg west." i'm emily chang. janet yellen weighs in on bitcoin, telling the senate banking committee the fed has no authority to regulate the digital currency. protesters set up shop outside the office of the bitcoin exchange. some of those protesters confronting the ceo face to face. what does it all mean for the
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bitcoin industry? is it the beginning of the end? new revelations emerge around the nsa. is reporting the u.s. agency worked with britain's surveillance counterpart to intercept and , evenyahoo! webcam images from users who are not suspected of doing any wrong doing. the program dated from 2008 to 2010. 1.8 million users were targeted in a six-month period alone. yahoo! is saying they were outraged, not were they aware of nor would we condone this reported activity. shows like "walking dead" kee ping networks alive. we will talk with jon erlichman. first, our lead. its empire bylt selling ads on its search engine. there's hardly a business and technology the company is not changing.
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one of its newest businesses is google cyber, high-speed internet in your home that leaves competitors in the dust. were taking an in-depth look at google fiber. the only other place other than kansas city where the service is already online. this town?ogle pick >> it already had fiber. the.comft over from $30 when the city borrowed million to wire houses. they found the way they were running it was losing money on the process. went tor of provo google and said, you are starting to roll this out all over the country. .ou have got to try provo now google is rolling out new
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equipment to run the existing fiber lines and create this google fiber in provo. attempt tor is an jumpstart internet service to unprecedented speeds. your typical cable modem, 10 megabits per second. who will fiber, 1000 megabits per second. fiber is faster than verizon's files -- fios. competitors google is leaving in the dust, centurylink and time warner cable. google fiber started in kansas city and 2012. now it is in provo and coming soon to austin. google wants to bring the service to 34 more cities. ting-edge modems cabled right into each customer's home.
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it will cost google as much as $900 per household. if google builds it, will customers come? 15 million atv customers will come, giving google fiber nearly as big a customer base as comcast's 24 million. >> google's expansion plan for fiber could threaten certain cable providers. let's talk about that. in austin, plans have been slowed down by at&t. they are saying, you cannot run your fiber of our telephone poles. we were here first. when were talking about this potential comcast-time warner -- just ase comcast google fiber has announced the rollout, comcast has increased the speed it is giving. they have lowered their cost
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just in the month. the competitive atmosphere is keenly being felt not just by comcast but by at&t and verizon. directv dish, we talked to some people who said they are getting pitches from all these companies is incognize the consumer play. it's hard to compete with the optical fiber speed. copper wires cannot match those speeds. it is part of google's business plan to benefit from the things they are really good at, which is understanding how networks work. they have already paid for that data usage. it's a clever use of their skill set and unused capacity. >> comcast may be trying to increase speed but they cannot get close to a gigabit, right? doesn't their service cap out at 20 megabits? they depends which service are offering. they have certain technologies where you can probably get as fast as 300 megabits per second.
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be 1000t would megabits. they are all exaggerating how fast the fastest speed is. with optical technology, it allows for a faster connection than copper wires. the kind of investment it would take comcast or at&t to increase their speed, they have not shown a willingness to do. >> i want to bring in jon erlichman from l.a. and paul sweeney, r bloomberg industries reporter in new york. it's an uphill battle for google to expand. how does that play out in terms of this as a business for google? more of anbably experimental business for google at this point, google not going to supplant their core search business. google brings a lot to the table in terms of technology and capital.
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it could be tens of billions of dollars to wire up the country for fiber-optic cable. do they want to do that? we don't know. they recently announced they're going to potentially enter 34 additional markets. that becomes a serious competitor to the companies out there who depend on broadband as the growth part of their business. rapid change happening in the cable broadband injury, comcast merging with time warner. people are saying that could slow down the innovation of the internet i keep speeds -- and keeep speeds slow. >> when you saw comcast and time warner get together, people said comcast had well positioned itself in the story of future of tv. behind closed doors people say, really? will that hurt the innovation
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story? from google's perspective you put heat on the traditional cable players. whether it is to provide faster speeds or keep them on their factfor other stuff, the you have broadband players who want to charge, this net neutrality issue, layers like netflix for how much of the service is coming down there pipes. google is coming down your pipe all the time. if you can build your own network you are pushing the ball back into their court. some cities are trying to get google to come to them. some cities including mountain view have said, this will not work. how does google overcome those kinds of challenges? >> google is not laying pipe here.
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they already have fiber to the home here. they don't have to do all of the work. they have been selective about the things they're working with. kansas city had to give up a lot to do this. dedicated workers and staff, salaried employees. they had an expedited process to use city infrastructure to get these things out. selecting places where they can get this rolled out in the most simple way. the customer service numbers for google have been strong. time warner cable is the only company worsen comcast when studies have been done on customer service. selectiveey will be in the markets they go into, places where they can make a difference but also get it done quickly. if they do 34 cities you will
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look at a substantial business where they have nearly as many customers potentially as a comcast. reading yelp reviews on fiber in kansas city and they are mostly positive. what about the regulatory issues? the fcc could make a ruling and change everything, change the entire landscape. what direction do you think the fcc will go? >> the rollout of google fiber and to the extent they expanded through 34 additional cities, it will be viewed carefully by the folks in washington, particularly in relation to the pending comcast-time warner cable deal. arguing, we operate in a very competitive not only television but broadband business as well. comcast could certainly point to the googles of the world starting to wire up the company
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as a new competitor in the marketplace, making it easier to get that deal approved. >> what is the view from the media on this? what do companies like netflix think about google fiber? traditional media companies love this. they have the cliche of content is king. about a company like disney. suddenly they can say, we get paid by traditional cable players, satellite players. now we can get paid through google fiber. because google fiber does not despite scale yet -- being a big company -- they end up paying higher rates to media companies like disney than what the traditional cable players are doing. come and is like disney are in a good position to say, you guys want to offer monday night football, or do you want to have google fiber and not be offering those customers monday night football. they generally see it as a positive thing.
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cori, we're going to get back to you later in the show. we will have much more coverage on google fiber and how it's being received in provo. netflix andvices of xbox like with google fiber? ♪
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>> i'm emily chang. this is "bloomberg west." bitcoin exchange has gone bust. beforeellen testified the senate banking committee. she was asked about the digital currency. take a look at what she had to say. >> the fed does not have authority with respect to bitcoin. it certainly would be appropriate for congress to ask questions about what the right forl structure would be virtual currencies that involve nontraditional players. >> this as a protester confronted a ceo outside company headquarters in tokyo. what does this all mean for the future of bitcoin? first of all, you used to broker big bitcoin trades but you don't
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do that anymore. why not? >> i could not bank. i had thousands of accredited investors i wanted to put into a bank and they saw bitcoin as too much of a risk. ?> is it too early is all of this uncertainty mean the beginning of the end of this digital currency? >> i don't think so. if you look at yellen's response, she saying we have the regulation we need. wemt. gox was audited, probably would not have had this problem. going forward were going to see companies that banks will want to work with. >> what is going on at mt. gox has had a big impact on the industry. where does it go from here? >> overall this will be a net positive. mt. gox has been a disaster over the years. it has been hacked. the biggest scare in the price
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drop was caused by them blaming the bitcoin protocol and transaction malleability. if we can move on without mt. gox we will see better exchanges pop up. >> so many bitcoins were stolen from mt. gox. how can people have confidence in any bitcoin exchange? has notthese years mark been transparent at all. people were waiting months to get documents verified. up, aexchange pops professional you -- new york exchange, you can expect quality products. >> who is behind mt. gox? >> a french guy who lives in japan. exchange. first it started in 2010. he had first mover advantage.
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if you wanted to do large trades you had to go there. those days are over. >> what are the biggest challenges bitcoin faces? adoption and regulatory approval, getting banks on board. what about all those people who have not gotten their money back and probably won't? >> it's the free market, it's early. this shows you there are better ways to store your bitcoin. i had not traded on mt. gox for years. you can use a product like piper wallet and store the bitcoins on paper so they can't be hacked. only trust someone with your keys and money as much as you have to. >> where do you see bitcoin going? >> this will bring more adoption. >> why would it bring more adoption? awareness toinging
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more people, more serious players into it. people are seeing this as a business opportunity. do you see this as a business opportunity? are you going to jump back in? >> i may. i'm going to wait longer. i'm going to see how these other guys do. >> what's the best opportunity? >> anything. this is like the early days of the internet. anything you threw on the internet stuck back then. the field is wide open. >> jered kenna, we will be watching to see if you're right. thanks for joining us. another nsa scandal. this time they are spying on you through your webcam. why yahoo! is outraged. ♪
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>> welcome back to "bloomberg west." i'm emily chang. a new neighborhood is popping up in new york city. the development is expected to lift manhattan's west side to new heights and the man in charge of the new construction is the president of hudson yards, one of the speakers at this year's bloomberg businessweek design conference. we spoke to him about his plans. hudson yards is a lively neighborhood that provides for people to live, work and play.
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michael -- we have a lot of skilled technicians. we have got artists and engineers and my job is to make that we are producing music and not cacophony. partn is a very important hudson yards.sion because we are building over the railroad tracks, we are building our own land, our own streets, our own gardens. there is a requirement that half of the ground plan had to be open to the sky. that is unusual. zoning, twicethe as big as you might think is normal development.
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we did not fully appreciate how big the buildings are. one challenge is the sheer magnitude of construction. billions of dollars of construction underway. it requires a lot of money. really seeing banks giving $500 million loans and that's what we need. the third challenge is making sure that we create a great place of play. i have always wanted to do a big commercial development in new york city. i don't think you can get bigger than this one. said, all my life as a preparation for this moment. >> that was the president of hudson yards. for more information on the bloomberg businessweek design conference, go to bloombergbusi google acquired one city's fiber optics network for just one dollar. why such a bargain? more on that next.
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>> you are watching "bloomberg west ." i'm emily chang. go today.letting the firings are part of a restructuring plan to help the company meet profit goals and adapt to a -- adapt to a shifting industry. workers in vermont, new york and minnesota were among those let go. baidu reportsna's a jump in sales. revenue came in at $1.5 billion in the fourth quarter, a 50% increase from a year earlier.
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the spending is curbing earnings growth for my strategy to reach more advertisers. google can add the polar bear capital of the world to its mapping. the company teamed up with polar bear international to chart the frozen tundra of churchill, manitoba. google attached its street view tracker backpack with 260 degree cameras, the goal to bring attention to the climate change. all day today we're taking an in-depth look at google fiber. cory johnson is back with us from provo, utah, where google fiber is rolling out. you spoke with the mayor there about their deal to get ubuntu come to the city. to comethey -- google to the city. how did they attract them? interestingly, this city does
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want to be on the cutting edge of business. there are three companies that receive over a billion dollars in funding in the last 18 months here in provo. i went for a walk yesterday with the mayor of provo to talk to him about this whole deal and how it came to be. when did this effort began? and aame into office four half years ago and as i came into office, the paper did an editorial and called our fiber network a noose around our next. that was the beginning for me -- necks. that was the beginning for me. we were not quite sure what we had. >> there are a lot of cities that have government paid for fiber networks that should be providing super high-speed internet and are not. that is where you were a few years ago? >> pretty close. we sold our network but the company we sold it too was struggling, and was unable to
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make it work as well. >> what was the problem? >> the gap between what it costs and the revenues that come in. it's pretty big. >> you had this problem. how does google enter into this? >> we started looking for a buyer. we looked high and low and talked with consultants to see who would be willing to come in and buy or run this network. it was in that process that -- there are not a lot of people out there who are willing to come into your city and take over a project like this. when we started talking to google, all of us were excited about the prospect. what has the effect been on the city? >> the most immediate impact is the buzz. everyone is excited. everyone says, i am moving my business to provo.
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almost every discussion ends with google. beyond that, the actual application -- provo loves technology, loves startups. it's a perfect match for google, and the speed and fiber into every home seems to be a perfect match. our schools are getting excited about it. starting to have dialogues about what does it mean for every home to have fiber in the home. the next step is to get people to understand how to use it. >> do you feel like you had to give up something? >> we had already put the fiber into the ground. we gave them that fiber. in return, what they gave us far outweighs. have free internet and that is hooked up for only $30. that $30 used to cost the city $1000.
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>> what was the cost for that fiber? >> the city took out a bond for $39 million 10 years ago. where the a point only thing that was still good in that network was the fiber. half of the cost was the fiber and half was the switches. that had to be replaced. they connected the remaining two thirds of our home from the streets into the houses. they did that at no charge to the city, in addition to the free internet. >> for continued service, they will have to pay for that? -- ifyou want five megs you want the gig, that is $70.
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>> sounds like a pretty good deal for provo. but what about google? why this one? aligns with a lot of their strengths, understanding how networks work. they have essentially their own backbone. sendingy own that, files around this town, sending e-mail back and forth, it essentially costs nothing. you have to understand how bandwidth works. has arrangements with the owners of other big pieces of networks, where they are buying capacity for their biggest days ever. buying for that peak moment they have unused capacity. this will give them a chance to use that unused capacity with the network time they are already buying.
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>> interesting. i wonder if apple and amazon will be responding in any way, given that google is tromping into uncharted territory here. >> peter lynch wrote this wonderful book called "one up on wall street." de-worsification, when companies were expanded to corollary businesses because they were there. it seems to be near the core of what google does, which is provide information for its users. i can see why this makes sense as a business plan, under the ground were all there fiber lay and their relationship with users of their services. >> cory johnson taking an in-depth look at google fiber. thanks so much.
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do you use a webcam for online chats? the nsa may be watching your every move if you do, according to one report. ♪
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>> welcome back to "bloomberg west." i'm emily chang. a report from "the guardian" says that the british spy agency reportedly collected 1.8 million images from yahoo! webcam chats in a six-month period between 2008 and 2010. the program was called optic nerve and they apparently saved one image every five minutes from random yahoo! webcam chats to an agency database. they got help from the nsa. ceo who worked at the nsa
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cyber center and created intelligence programs for the u.s. army joins us now, and the in san francisco. i'm a journalist and throughout this whole nsa, all the revelations that have come out, i'm trying to be objective, but this one really upset me. do i need to go home i close all my laptops and unplug every single camera and electric appliance in my house? >> as a consumer you have a lot of different options to webcam chat. you really want to pick something that has encryption built in. that is something yahoo! did not do. they did not make it possible for their customers to protect themselves because they did not encrypt everything. >> yahoo! has come out with a statement saying they are absolutely floored by what is
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happening. what do you think of this, giving you have worked inside the nsa? >> i don't want to confuse the fact where nsa or in intelligence agency hypothetically has the capability and we are jumping to the conclusion that all of a sudden everybody is phone verbal. the intelligence agencies and committees look at valid targets to keep us stay for -- safe. i don't think there is a private that you have any reason to worry that your webcam is hypothetically being used for access to intelligence. >> based on the report, there were plenty of innocent people who could have been dragged into this. withthey looking at people certain kinds of user names and randomly saving images inside their home? >> when you talk about
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intelligence collection, sometimes there can be a broad application of collection, as done with any type of intelligence from radio waves do anything. recently saidder that the nsa collects about 2 million intercepts of french communications every day. math onere to do the how many people it would take to translate that information, it would be about 100,000 people just to do french translations. the nsa or any other intelligence committee are not looking at content for the sake of looking at it here at there may -- it. targetingbe individuals associated with national security activities. >> do you see any problem with the practice as outlined in the "guardian" article? agencies wille look at the modern communication medium of the day, just like
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back before there was an nsa, there was national intelligence collection capability. they looked at telegraphs or telephones. in world war ii they looked at high frequency radio transmissions to track what the axis powers were doing. the intelligence communities have a mission to look at modern communications to keep us safe. surgein iraq during the and i led the intelligence element, and we were able to take the ied attacks in our area based onrom 150 to 5 our intelligence collection date abilities -- data abilities. it helps control the bad people out there. >> yahoo! does disagree with saying this report represents a whole new violation of our users' privacy. we strongly call on the world's governments.
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think of what bob is saying? >> i don't think there's any disagreement that intelligence communities need the ability to capture information. what privacy advocates are concerned about is the extent of it. where do you draw the line? hadthe discussion even been about where is the right place to take this? if it is ok to look at yahoo! webcams, what else can we look at? discussioneen some around that in the sense that they are for kids. how long do you store this information, who gets access to it -- it needs to be discussed more openly. >> i thought we knew where the
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line was drawn but every day the line becomes a different line. chris eng and bob stasio, thank you for weighing in. so-calledews, the walkers are bringing in big bucks for amc networks. the parent company of amc reported fourth-quarter net income more than doubling. jon erlichman has more from l.a. thisthink we all know that "walking dead" phenomenon has been very real, even over the last three sundays this show has been going up against the winter olympics and doing fine. here is a show that is on cable that has been generating double-digit millions of viewers , doing incredibly well in the 18 to 49 demographic. they have a lot of runway with this program because they own it
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outright. the advertisers are on board. we saw 30% revenue growth in advertising over the course of the last year. >> you are only as good as your last hit. what else are they working on? a they have a few, revolutionary wardrobe is coming up. they have a spinoff from "breaking bad." they have other ones that have not gone well. you are right about that. jon erlichman there on "walking dead." we will be right back. ♪
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>> welcome back. i'm emily chang.
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jeff bezos made headlines when he unveiled the plan to deliver packages by drones. netflix is not letting amazon have all the fun. the company released a parody video showing netflix users getting their dvds by drones. the idea,pokes fun at saying unlike other companies trying to rush proven technology , they spent days working out all the bumps. high speed internet is important, but how much bandwidth does one person really need? cory johnson tracked down one of the first users of google fiber in provo, utah. i'm so curious how much better google fiber really is. >> i have not used it yet. moore is the right number. we talked to a guy who is one of the early users, a big tech user.
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we asked him about his experience. check it out. fiber two weeks ago. the main way i would describe google fiber is the junk between dial-up and dsl, it is so fast you do not know the floating times anymore. i got the gigabit plus tb plan and it was $120 a month and i did not have to pay any installation fees. when it comes to gaming on the xbox, connecting to friends is pretty much instantaneous. one of the things i wish google fiber had is more apps for the tv. right now it has netflix but i wish it had youtube and other ways to browse media online. from the tablet i can see my entire guide for all the normal stations and if i want to pull up something from my dvr, i just hit play and it brings up instantly. here i am in netflix. let's see how fast something loads.
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the only thing i don't like about google fiber is how much time i sit on the couch watching tv. >> getting a little jealous watching that trade what would it take to get google fiber in a major metropolitan area like san francisco? >> i saw bill gates give a speech. he was talking about how broadband was going to roll out and there was this new technology called dsl. he said that moore's law works for semiconductors but not for bulldozers. superfast rock band will be a broadband will be slower than the ability to create data. expensive thing and take companies with deep pockets and a willingness to go in and lay this fiber. >> we will be watching. it's time for the bwest byte, one number that tells a lot. cory, you've got the byte today. what is it?
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>> 19. comcastime warner merger goes through, time warner comcast will control 19 of the 20 largest data markets in the u.s. that's a number we will hear a lot of. google fiber is one of the few efforts that might actually create competition in the marketplace. i don't know that google wants the time warner comcast merger to go through. thathave seen reports comcast plus time warner, a merger could set back internet speeds by a decade. for a decade we won't see much innovation in the speeds of a comcast and time warner. jon, what do you make of that number? >> that gets directly to what cory has been talking about. you have got the google wildcard to keep all those cable companies honest. the cable companies have been spectacle -- skeptical of the
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nationwide rollout of google fiber. they do not see it in markets like new york city. it is true that could be the one thread for those players going forward. >> cory? >> jon is right. right now he has got provo and kansas city in austin. google says they will add 30 or more. that could make a big change. we will see what they end up doing. salt lake city as well, and a few other cities. why would comcast spend the money to upgrade their service and spend all that capital when they don't have competition in the marketplace? >> cory johnson, our editor at large from provo, utah. jon erlichman, our senior west coast correspondent. thank you all for watching this edition of the show. ♪
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>> welcome to "lunch money," where we tie together the best stories and videos in business news. i'm adam johnson. here's a we got today in tech. google dishes fiber. this search giant wants to replace the cable guy and will do it one city at a time. and building manhattan's brand-new neighborhood. and in motors, tesla's road to efficiency with a plan to create the largest battery factory in the world. we will take you there. and in sports, the tar heels. how some of the athletes at university of north carolina never had to open a book. and brick by brick, lego. it's more than just toys.

Bloomberg West
Bloomberg February 27, 2014 6:00pm-7:01pm EST

The personalities, companies and trends that are transforming the global economy.

TOPIC FREQUENCY Provo 12, Comcast 10, Emily Chang 6, Nsa 6, Kansas City 5, Us 5, Jon Erlichman 5, Google 4, Cory Johnson 4, Utah 3, New York City 3, Austin 3, U.s. 3, San Francisco 3, New York 3, At&t 3, The City 3, Amc 2, Manhattan 2, Verizon 2
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